The Secret Ingredients of an Amazing Company Culture

If you were asked about your top priorities as a manager, how would you answer? Increasing productivity would probably be first on your list, along with steady company growth, low employee turnover, seamless teamwork, and high employee engagement — after all, most businesses share similar goals.

However, you might not have considered developing an excellent company culture among your top-tier priorities, even though it is the foundation for every one of your key goals. When focusing on creating an amazing company culture, you will discover that other elements of business success fall into place organically. Let’s unpack that concept a bit and see why.

What Is Company Culture?

The first step toward improving your company’s culture is to have a clear handle on what the term means. One of the most accurate definitions is offered by business change strategist John Kotter. He defines company culture as “group norms of behavior and the underlying shared values that help keep those norms in place.” The key words in this definition are “shared values.” Employee alignment with your company’s mission and values is a critical component of positive company culture. A sure indicator of poor company culture is a workforce, total or partial, that has no personal interest or investment in the overall mission of their organization.

Why Company Culture Matters

A worldwide survey of 20,000 workers, conducted by Harvard researchers, found unequivocally that “culture drives performance,” but only 31 percent of employees report they are engaged with their work. Furthermore, the average employee would only give his or her company a grade of “C” if recommending it to a friend, according to Glassdoor statistics. A Duke University survey of 1400 CEOs and CFOs found that only 15 percent said their company culture is where it needs to be, while 92 percent said improving company culture would improve the overall value of the business.

Other research published in Harvard Business Review finds that disengaged workers cause 60 percent more errors and defects in work performance, while those under stress from negative cultures can increase a company’s health care expenditures by an average of 50 percent. We could go on with the dire statistics, but we’re certain you get the idea. How do you do the right thing for your employees as well as your company?

How to Create a Positive Company Culture

An interesting roadmap for creating a positive company culture can be found in the science of self-determination theory. Researchers writing in Harvard Business Review have identified three universal human needs that are central to fostering employee motivation. These three needs are autonomy, competence and relatedness. Let’s look at each of the three in turn:

Autonomy

To build your employees’ happiness through autonomy, make sure the goals and timelines you ask them to meet are developed in a collaborative manner. Workers need to feel that they have some control over their schedules and approach to tasks, rather than having every aspect of their workday micromanaged. HR professionals know that flexible work hours are at the top of most candidates’ lists of desirable benefits and perks.

Another aspect of leadership that contributes to a positive work culture is the avoidance of pressure and stress. The aforementioned HBR report states that “Sustained peak performance is a result of people acting because they choose to—not because they feel they have to.”

Competence

One of the most powerful employee incentives you can offer is the opportunity for training and development. Showing that you care about the evolution of your workers’ careers is a powerful expression of employee appreciation. This development may take some careful guarding of educational funds in your human resources budget, but the resulting increase in employee well-being will be worth your investment.

In addition to working with your team to set performance goals, you can nurture employee success by setting learning goals. Human beings derive a deep satisfaction from increased skills and competence, independent of every other type of employee reward.

Relatedness

This term describes the need inherent in most humans to feel connected to a larger team effort, and to be recognized and appreciated by other people. Employee recognition best practices should be built around this fundamental element of human psychology, providing opportunities for both colleagues and supervisors to offer recognition and rewards. While your team members don’t exert effort for the sole purpose of receiving rewards, they will thrive in the climate of solidarity and unity that those rewards represent.

Another crucial aspect of relatedness pertains to alignment with company values. The HBR analysis points out that employees need to connect their tasks with a noble purpose, and to feel that their own personal values are expressed in the way they spend their work days.

The CEOs interviewed by Duke University researchers were unequivocal in their statements that company culture drives “profitability, acquisition decisions, and even whether employees behave ethically.”